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Tiffany's Will Get Trumped

Nov. 30, 2016 1:21 PM ETTiffany & Co. (TIF) Stock
Duane Bair profile picture
Duane Bair
483 Followers

Summary

  • More details have emerged in regards to Trump's living situation.
  • Having the President living next door will harm traffic at Tiffany's flagship location.
  • The full impact should be expected in Q4.

The second half of 2016 has been great for Tiffany & Co (NYSE:TIF) investors. After posting better than expected Q3 figures, the stock rallied 5% in initial trading, hitting a 52-week high. While management downplayed the concerns related to traffic at the flagship store, there is perhaps reason to be more worried going into Q4.

Another SA author noted the security concerns at Tiffany's in an article published shortly after the election. Given that so much information has materialized in the weeks since then, it is important for investors to be up to date on the potential impacts to business at the flagship 5th avenue store.

While sales at the Manhattan location account for about 10% of overall revenue, it has been a noted area of growth for the company in the past year. In the Q2 conference call, management noted that increased sales at the flagship location were largely responsible for increases in US sales numbers. The election results present two potential obstacles to any growth at the Manhattan location.

First, Tiffany & co. is located at the corner of 57th and 5th in midtown. The location is among the most coveted (and expensive) retail spaces in the country. Trump Tower is next door, at 56th and 5th. The entire block next to the tower on 56th will be permanently closed to traffic over the next four years as Donald Trump will travel back and forth regularly. The Presidential transition team confirmed that the future first family will remain in Trump Tower until approximately Q2FY17. That means the main entrance to Tiffany's will be inaccessible for the entire holiday shopping season and beyond (shoppers can still enter at a side entrance on 57th street). All shoppers who wish to enter Tiffany's will go through a security screening check point on 57th street,

This article was written by

Duane Bair profile picture
483 Followers
I am interested in researching and writing unique articles that combine politics and finance. With a background in Political Science and Economics, I often look at the impact regulations have on the bottom line. I generally take a short perspective when looking at companies. Too many companies get away with lying to investors and the public. I hope that my articles can shine some light on the misstatements made by various management teams and add to improved corporate governance in this country.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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